DR 97-238
Connecticut Valley Electric Company Inc.
1998 Conservation and Load Management Filing
Order Approving Filing
O R D E R N O. 22,892
April 1, 1998
APPEARANCES: Kenneth C. Picton, Esq. for Connecticut
Valley Electric Company Inc. and Michelle A. Caraway for the
Staff of the New Hampshire Public Utilities Commission.
I. PROCEDURAL HISTORY
On November 14, 1997, Connecticut Valley Electric
Company Inc. (CVEC) filed with the New Hampshire Public Utilities
Commission (Commission) a petition for approval of its 1998
Conservation and Load Management (C&LM) Proposal for C&LM
Percentage Adjustment (C&LMPA) Effective January 1, 1998. The
C&LMPA includes recovery of C&LM costs related to regulatory
reporting, net lost revenues, incentive share and applicable
interest.
By Order No. 22,810 (December 24, 1997), the Commission
scheduled a prehearing conference for January 13, 1998, set
deadlines for intervention requests and objections thereto,
outlined a proposed procedural schedule, and required the Parties
and Commission Staff (Staff) to summarize their positions with
regard to the filing for the record. There were no Motions to
Intervene filed. The Office of the Consumer Advocate is a
statutorily recognized intervenor. On January 27, 1998, the
Commission issued Order No. 22,842 approving the procedural
schedule.
Pursuant to the approved procedural schedule, CVEC and
Staff engaged in formal discovery and technical sessions. On
March 3, 1998, Staff filed a letter with the Commission stating
that Staff did not file testimony in this proceeding and that
Staff and CVEC agreed that it was not necessary to proceed with
the Settlement Conference scheduled for March 9, 1998. Instead,
Staff and CVEC believed that the Commission would be served best
by presenting the filing at the March 24, 1998. A hearing was
held on March 24, 1998 before the Commission at which CVEC
presented two witnesses supporting the filing.
II. 1997 CONSERVATION & LOAD MANAGEMENT PROGRAM
By Commission Order No. 22,536 (March 31, 1997) issued
in DR 96-362, CVEC's 1997 C&LM Program docket, the Commission
approved a Stipulation entered into between CVEC and Staff.
Based primarily on the Commission's Restructuring New Hampshire's
Electric Utility Industry: Final Plan (Final Plan), CVEC and
Staff stipulated that CVEC would be allowed to use the 1997
program year to ramp down all existing C&LM programs that it
offered while completing installations of those measures to which
it had already made commitments. The goal of ramping down the
programs was to end program expenditures and funding as of
January 1, 1998, or as soon thereafter as practicable. The 1997
C&LMPAs were established at a level to collect an estimated
$250,000 of C&LM direct costs, net lost revenues and financial
incentives.
III. 1998 CONSERVATION & LOAD MANAGEMENT PROGRAM
At the March 24, 1998 hearing, the Company presented
two witnesses, K. Dean Pierce, Manager of Market Planning, and
Carl Scott, Consultant, Revenue Requirements, to describe and
support CVEC's 1998 C&LMPA filing. For 1998, carry-over direct
program costs, costs for regulatory reporting, and recovery of
net lost revenues and financial incentives represent
approximately $127,000 of the amounts to be collected through the
C&LMPAs.
Per the Stipulation approved by Order No. 22,536, CVEC
used 1997 to ramp down its C&LM programs. CVEC is not proposing
any programs for 1998. Direct program costs incurred in January
through March 1998 represent the remaining costs of serving
participants CVEC had made commitments to in 1997. For 1998,
CVEC proposes only $5,000 of direct costs related to monthly
regulatory reporting and the filing of the 1999 C&LMPA by
November 1, 1998.
Witness Pierce described a proposal to eliminate the
C&LMPAs in the future. As described in his written testimony,
CVEC presently projects net lost revenues to be collected through
the year 2024. Given that all measure installations are known,
CVEC could project the stream of net lost revenues based on all
measures installed through 1997. If that stream of revenues was
discounted, that present value could be recovered in a single
year and the C&LMPAs could be reduced or eliminated if no further
C&LM costs were incurred. Ex. 1 at p. 10.
CVEC Witness Scott stated that CVEC's response to a
data request estimated the net present value of net lost revenues
for the period 1999 through 2024 to be approximately $510,000.
Witness Scott also stated that CVEC was not requesting that this
proposal be approved in this docket and that CVEC and Staff did
not fully explore the implications of implementing this proposal
for 1998.
On March 20, 1998, the Commission issued its rehearing
order, Order No. 22,875 in Docket DR 96-150, Electric Utility
Restructuring. CVEC witnesses were not prepared to answer how
Order No. 22,875, as it pertains to energy efficiency programs,
applies to CVEC except to state that CVEC currently has no plans
to reinstate its C&LM programs in 1998.
Commissioner Geiger asked the witnesses if CVEC is
currently tracking customer requests for its C&LM programs.
Witness Pierce stated that such inquiries are not being tracked
by CVEC but that they could be tracked as long as the capability
existed with CVEC's parent company, Central Vermont Public
Service.
The revised C&LMPA calculation, Tariff 10th Revised
Page 20, was presented at the hearing. Ex. 4. The C&LMPAs were
calculated using actual data known through February 1998.
Additionally, the total estimated revenues for April through
December 1998, which is the denominator used to calculate the
C&LMPAs, are based on the frozen Fuel Adjustment Clause (FAC) and
the Purchased Power Cost Adjustment (PPCA) rates for 1998 as
ordered by the Commission in Order No. 22,815 (December 31, 1997)
in Docket DR 97-241.
CVEC proposes a Residential C&LMPA of 0.34% and a
Commercial and Industrial (C&I) C&LMPA credit of (0.78%). These
compare to C&LMPAs of 0.82% and 2.51% for the Residential and C&I
classes respectively. The Residential C&LMPA of 0.34% equates to
a weighted annual average decrease of 32 cents ($0.32) on a
monthly 500 kilowatt-hour bill. Ex. 4, Revised Attachment CJF-5.
CVEC and Staff also request that the Commission waive
the application of N.H. Admin. Rules, Puc 1203.05(a) so that the
1998 C&LMPAs may be effective on a bills rendered basis.
IV. COMMISSION ANALYSIS
After careful review of the November 14, 1997 filing,
supporting testimony at the March 24, 1998 hearing and the
exhibits, we find that CVEC's proposed C&LMPAs, as revised at the
hearing, are reasonable and in the public good.
Consistent with Order No. 22,536, CVEC used 1997 to
ramp down its C&LM programs to effectively terminate them on
January 1, 1998. The termination of CVEC's C&LM programs is not
inconsistent with the Commission's stated policy objectives
regarding energy efficiency programs in either the Final Plan or
Order No. 22,875 issued March 20, 1998.
The rehearing order stated our belief that "it is
appropriate to move as quickly as possible from the payment of
lost revenues as part of any DSM program." We are searching for
ways to eliminate lost revenues and direct CVEC and Staff to
consider the proposal detailed above along with other possible
alternatives which may achieve our goal. CVEC and Staff can use
the working group that is to be established as part of Order No.
22,875 as a forum to discuss different methods with other
parties. CVEC and Staff should carefully consider of the rate
impact of all alternatives considered. A discussion of the
methods considered and the impacts of each should be incorporated
in CVEC's 1999 C&LMPA filing.
Additionally, we direct CVEC to track the inquiries it
receives for its C&LM programs. Minimally, CVEC must maintain a
log of the number of inquiries it receives, the nature of the
inquiries and the specific programs that the customers are asking
about. This information shall assist us in determining the
extent to which customers are expecting energy efficiency
programs to be offered by their local distribution companies.
CVEC Witness Scott described that the revenues used in
the calculation of the C&LMPAs were based on the frozen FAC and
PPCA rates. Should the Commission authorize any dramatic change
to the FAC and/or PPCA rates during the April through December
1998 period which would have a material effect on the projected
over/undercollection at December 31, 1998, CVEC shall consider
filing for an interim C&LMPA.
Finally, consistent with treatment we have recently
allowed for Granite State Electric Company in Docket DR 97-211 in
Order No. 22,818 (January 2, 1998), we waive the application of
N.H. Admin. Rules, Puc 1203.05(a), which requires generally that
rate changes be implemented on a service rendered basis, and will
allow CVEC to implement its C&LMPAs on a bills rendered basis.
This waiver, pursuant to Puc 201.05, produces a result consistent
with the principles embodied in Puc 1203.05(b), which sets forth
exceptions for allowing rate changes on a bills rendered basis,
and is in the public interest because it eliminates consumer
confusion and reduces administrative costs.
Based upon the foregoing, it is hereby
ORDERED, that the proposed C&LMPAs, as revised at the
March 24, 1998 hearing, are hereby APPROVED on a bills rendered
basis; and it is
FURTHER ORDERED, that CVEC shall track, to the best of
its abilities, the number of inquiries it receives for C&LM
programs, the nature of the inquiries, and the specific programs
that the customers are asking about. A summary of this
information shall be included in CVEC's 1999 C&LMPA filing; and
it is
FURTHER ORDERED, that CVEC shall submit its 1999 C&LMPA
filing by November 1, 1998; and it is
FURTHER ORDERED, that CVEC shall file compliance tariff
pages within ten days of the date of this order.
By order of the Public Utilities Commission of New
Hampshire this first day of April, 1998.
Douglas L. Patch Bruce B. Ellsworth Susan S. Geiger
Chairman Commissioner Commissioner
Attested by:
Thomas B. Getz
Executive Director and Secretary